GoFish, an advertising network aimed at ages 6-17, has announced a loss of $3.6m in Q2, although that's down on $5.9m the previous year. GoFish has had some trouble recently, and has recently brought in a new CEO, Matt Freeman. Things may be looking up, though; they've had a 95% increase in revenue between Q1 and Q2. GoFish currently has access to some impressive inventory, on sites such as Miniclip, as well as in virtual worlds including Cartoon Doll Emporium, MinyanLand, WeeWorld, Whyville and Rocketon.
The entire business model rests on a long tail of sites aimed at the 6-17 demographic emerging. GoFish refers to this trend with the rather less impressive buzzword 'deportalization': "Deportalization is a term that describes the phenomenon where Internet traffic is moving from large portals to smaller, disparate sites. From February 2000 to October 2006, the number of websites grew from 10 million to 100 million. During the following 12 months, the number of websites grew to 143 million. The drivers of this trend are search and increased user confidence with regard to the medium. We expect that, in the next several years, the large sites will continue to lose traffic to smaller sites. We also believe that vertical advertising networks, such as the GoFish Network, will receive an increasing share of advertising dollars spent online."
Whilst the statistics they use are largely irrelevant - the number of websites is of little consequence, if no traffic is going to the new websites – other advertising networks have enjoyed the fruits of a new long tail. It matters, because if a single site receives enough share of the audience, it can sell its own ads, without the need to give a cut to the network. Niche ad networks like FM Media are seeing real success, particularly with blogs. However, it is by no means certain that GoFish can capitalise on that. In the virtual worlds space, there isn't a long tail at the moment, with a few big players dominating. Data from K Zero also showed that most advertising campaigns were still happening on a small number of virtual worlds. Virtual worlds also arguably favour an oligopoly because of the social 'chicken and egg' problem inherent to the social web. Given the importance of virtual worlds to kids' activity online, these are significant hurdles for GoFish.
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